On-going
series: Crisis in the Caucasus - 2008
The Russian / Georgian Conflict and Its Impact on AzerbaijanWindow on Eurasia: Original
Blog Article

Tallinn, November 13 -As the economic crisis has deepened
in the Russian Federation, many sectors ­ such as restaurants,
high tech and furniture outlets, and clothing stores ­ have
seen their sales decline as Russians tighten their belts. But
others­ such as pawnshops - have actually seen their business
boom, as people attempt to find the means to make ends meet.

Writing in "Moskovsky komsomolets"
this week, Eva Merkacheva reports that the number of restaurant
patrons has fallen by about 10 percent, somewhat more in high
end establishments and somewhat less at more moderately priced
ones, a pattern she says is repeated elsewhere in the consumer
economy. http://www.mk.ru/blogs/MK/2008/11/10/society/380184/

But there are two kinds of business,
she continues, that are doing even better than they were before
the economic crisis began to spread: stores selling home improvement
materials which people are patronizing at slightly greater rates
"before things get even worse" and pawnbrokers, the
traditional resort of those down on their luck, where the lines
are growing.

In recent weeks, Mikhail Unksov,
the president of the Russian Pawnbrokers League, told Merkacheva
that the number of patrons of such establishments has increased
by 12.5 percent. In cities like Moscow with more than a million
people, that number has gone up 20 percent; in smaller cities,
30 percent; and in rural areas, which often don't have pawnshops,
much less.

During the last month alone,
he continued, pawnbrokers in the Russian capital have given out
approximately one billion rubles (40 million U.S. dollars) in
exchange for tings pawned. Ninety percent of this is for jewelry,
three percent for automobiles, and "all the rest: for video
equipment, mobile telephones, and the like.

An employee at one of the Moscow
pawnshops said that people are selling expensive things they
have purchased on credit and can no longer make the payments.
Such people, she added, have "too great expectations"
about what their goods will bring, and when the pawnbrokers can't
sell them, they often become "hysterical."

Patronage of pawnshops, of course,
is not a perfect indicator of just how difficult things have
become for many, but it is a useful and even objective measure
of what many Russians are now being forced to do to try to maintain
their standard of living as they see their incomes drop or even
lose their jobs.

That is clearly Merkacheva's
message. And she ends her article with the results of a poll
which suggests that what she describes as Russian "belt
tightening" is going to continue for some time: Fifty-six
percent of Russians say they are cutting back on entertainment
outside the home, and 48 percent plan to reduce purchases of
high tech equipment.

In that environment, pawnshops
are likely to be a major growth industry, although like many
others that highlight the difficulties Russians face now, it
is not one that the Kremlin and its supporters are likely to
point to frequently or with pride.